Thursday, April 1, 2010

Cannabis country?

Mendocino County's economic future may rest with a marijuana-fueled
version of Wine Country, complete with tasting rooms, bud boutiques and
pot-garden tourism.

"It's the only thing we have that brings money into the county," said
Mendocino County Supervisor John Pinches, who believes that marijuana
accounts for at least half of the county economy.

Estimates of the value of the county's pot crop range from $1.2 billion
to $4.4 billion. In comparison, the county's total taxable retail sales
were $1.3 billion in 2007, according to the Center for Economic
Development at CSU Chico.

Pinches is one of many in the county who believe now is the time to
start planning on how to capitalize on Mendocino's famous crop, should
it become legal.

Local marijuana proponents and opponents alike widely believe
legalization is inevitable, that regulation of the plant will be crucial
to keeping it out of the hands of children and that taxation could boost
county coffers and help offset the criminal and societal costs of making
pot more widely available.

A measure that has qualified for the statewide ballot in November would
make it legal for anyone over 21 to possess up to an ounce of marijuana
and to grow it for personal use. Commercial operations would require
government approval. It also would authorize local governments to
regulate and tax pot, which remains a primarily underground economy
despite being legal for medicinal use.

A Field Poll conducted in 2009 indicated 56 percent of Californians
favor legalization. But marijuana would remain illegal under federal
law, so it's unclear how passage of the measure would play out.

Nevertheless, the initiative has sparked speculation and debate over its
possible effects. Some pot growers fear legalization will cause a
precipitous drop in pot prices, while others see new business
opportunities for counties that have a head start on name recognition.

A public forum on the future of marijuana was held in Humboldt County
last week, and another is planned in Mendocino County this month. The
two counties, along with Trinity County, comprise the world-famous
"Emerald Triangle" and rank among the state's top marijuana producers.

The April 24 forum, "The Future of Cannabis in Northern California,"
will be held at the Saturday Afternoon Club in Ukiah. It's sponsored by
marijuana advocates but will include law officials and business
representatives.

"It affects our community, and it's time to have the discussion," said
Bert Mosier, the chief executive officer of the Ukiah Chamber of
Commerce and a scheduled speaker.

Visions for the future include marijuana smoking salons where people who
are 21 or older could sample Mendocino County's best weed.

"I definitely think if they legalize it, that would be a market," said
Matthew Cohen, who heads a medical marijuana cooperative near Ukiah.

Tours of marijuana cooperative gardens also could attract visitors to
the county, he said.

It would be "exactly like wine tasting," said Wendy Roberts, a Mendocino
business consultant and candidate for the county Board of Supervisors.
Like many in Mendocino County, she worries about societal problems,
including children having increased access to marijuana, but also
believes legalization is inevitable and necessary for limiting its use
to adults.

Advocates say Mendocino County is ideally situated to benefit from
marijuana-related tourism because it's known worldwide for the quality
and quantity of its product.

Pot now is cultivated throughout the state, but Mendocino County remains
among the top five producers of marijuana seized by law authorities.
More than 450,000 marijuana plants were seized in Mendocino County
during the state's annual pot-eradication effort in 2009, according to
law officials. That's just about 10 percent of the 4.4 million marijuana
plants seized in the state.

Mendocino County Sheriff Tom Allman estimates that only about 10 percent
to 15 percent of the pot grown in the county is eradicated each year.
That estimate is widely used to compute the value of the crop. The top
estimate of $4.4 billion is based on a conservative assumption that each
plant produces one pound of marijuana valued at $1,000, said Ellen Komp,
of North Coast NORML -- National Organization for the Reform of
Marijuana Laws. In fact, they can produce several times that much, she
said.

Currently, an ounce of marijuana sells for $150 to $500 an ounce, said
Aaron Smith, California policy director for the Washington-based
Marijuana Policy Project.

A California Board of Equalization analysis estimates that legalizing
and taxing pot in California could yield $1.4 billion in revenue if a
$50-per-ounce levy were to be placed on retail sales in addition to
sales tax.

Sales taxes alone would yield $392 million, according to the report.

The Board of Equalization analysis takes into consideration that prices
will fall if pot is legalized. It estimates a drop of 50 percent, but
states that consumption could increase by 40 percent as a result of the
price drop.

The decline in prices is expected to take much of the profit out of pot,
a concern for some underground operators. They also fear that big
tobacco companies will step in and begin growing pot on farmland in the
Central Valley, effectively killing North Coast production.

Smith, of the Marijuana Policy Project, believes prices will drop, but
not as dramatically as some growers fear. "There's no reason to be
concerned that the industry will go away," he said. Local growers who
create niche markets, like organic and hand-picked marijuana, should do
well, Smith said.

Many proponents of legalization say a drop in pot prices would be good.
"It's way too expensive," said Mike Johnson, who runs a Mendocino County
medicinal cannabis club. It would be more accessible for people who
really need it for medicinal purposes if it was cheaper, he said.

Proponents of legalization say a decline in profit also would deter
pot-related crime. Law enforcement officials don't buy the argument.

"You're still going to have a black market," said Mendocino County
Sheriff's Capt. Kurt Smallcomb.

Of the estimated 8.6 million pounds of marijuana grown in California in
2006, only 1 million pounds was consumed within the state, according to
the Board of Equalization analysis.

That means most of it is being exported to other states, where it would
remain illegal unless the federal government decriminalizes marijuana.
The exports will remain illegal and untaxed and continue to attract
criminals to the state, law officials said.

"There's always going to be crime, greed and violence associated with
marijuana, whether it's legal or not. Anyone who thinks otherwise is
kidding themselves," said Sheriff Allman.

Mendocino County Supervisor John McCowen, who favors legalization if
it's nationwide, said state legalization will not bring the kind of
business citizens want.

"The tourists already are coming here. Unfortunately, they're bringing
guns with them," he said.

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